A Guide to Creating a Cell Phone Policy for Your Nonprofit

These days many employers provide cell phones for their employees so that they can be connected at all times. This can be both a blessing and a curse for employees. On one hand, they don’t have to move to far to get the information they need, on the

English: Mobile phone evolution Русский: Эволю...

other hand weekends can be interrupted by an email that normally wouldn’t have been seen until Monday. Either way, managing the cell phone usage of your organization can be a full time job. Today I’m going to share some questions you should ask yourself when setting up a cell phone policy for your agency.

Do you really need cell phones?
For some organizations it makes sense for employees to have cell phones provided to them. The work that is being done happens around the clock or from remote locations. For others, it might be more of a matter of connivence. Take a moment to think if providing cell phones is really needed.

If you decide that cell phones are needed, who in the organization needs one?
This is going to be breaking news, but not everyone needs a cell phone. Everyone might want a cell phone, but not all positions within your agency require one to be provided. Be selective about this because it is much easier to give someone something than to take it away.

What type of phone is needed?
It seems like there is a new phone out every day. I advice to get the phone with the least amount of features needed. If this person is only needed to be available by phone, does she really need a smartphone? Also just because a person might need the bells and whistles of a smartphone, doesn’t mean that smartphone needs to be an iPhone 5. Look at all of your options and really think about what the user of the phone really needs.

What plan to go with?
The good news here is that most major cell phone providers will work with nonprofits to set up a contract that work for them. Make sure you shop around and see which company can do the most for you. Don’t rule out the prepaid option either. It might be the best way to go for your organization. Also, keep your eyes out for smaller competitors to the major providers, like Ting. Ting has a flexible plan system that lets you prioritize which features (talking, texting, or data) are most important and you pay accordingly. So if one person on your team doesn’t need to talk on the phone much, but needs to have data access all of the time, Ting allows you to create a plan that provides just that.

Can we use our personal phones?

Image representing iPhone as depicted in Crunc...

Employees may want to use their own phones for work. Some organizations provide a stipend to each employee to use toward their cell phone plan. This can be a solution for your agency, but you still need to protect your organization’s data on that phone. I recommend setting up an agreement for the employee to sign. It should included statements that allow your agency to be given access to the device to see the configuration of any application that deals with sensitive data. The employee should also use a lock on their phone to keep that data safe. Also, your agency needs to be ensured that the device will be wiped clean before the employee provides it to another user.

I hope this guide helps you organize your cell phone policy for your organization. Have any tips or best practices to add? Post them in a comment below!

Uh oh . . . you’re thinking outside-the-box again

Welcome to O.D. Fridays at DonorDreams blog. Every Friday for the foreseeable future we will be looking more closely at a recent post from John Greco’s blog called “johnponders ~ about life at work, mostly” and applying his organizational development messages to the non-profit community.

Today, I am not really “focusing” on John’s recent post about inside-the-box thinking, outside-the-box thinking, and just plain old reconstruction of your box thinking. Instead, I’m using his post as a springboard to set-up deeper discussions next Tuesday, Wednesday and Thursday on specific “inside-the-box thinking” topics pertaining to the non-profit community.

When I was a young executive director a decade ago, I decided a few years into my tenure that I probably didn’t know everything there was to know about running a non-profit organization and a business. So, I committed myself to becoming a lifelong learner about such things. I started reading various manuals that our national organization published. I used Google to search for online articles. I especially loved going to Borders book stores on weekends and purchasing business books.

When John talked about the importance of organizational leadership and building new boxes where employees can be productive again, it reminded me of a book I once read and still sits on my bookshelf. The author is Kirk Cheyfitz, and the book is titled “Thinking Inside The Box: The 12 Timeless Rules for Managing a Successful Business“.

After reading a sentence or two from that short promotional passage on the inside cover, purchasing the book was a forgone conclusion. It was these words that hooked me and succinctly captures the essence of the book:

For the past decade and more, everyone in business was told that success in a rapidly changing world required constant “thinking outside the box.” The result has often been financially and ethically disastrous. Now, in a radical reassessment of what really works, this book shows that the business world lost its way when it forgot how to think inside the box.”

Hmmmm? Re-reading those same words today now makes me think about Wall Street, mortgage-backed securities, derivativesand the economic crash of 2008. However, I will resist the temptation of going down that rabbit hole this morning.

There are many things that stick with me 10 years after reading this book. One of the biggest things is what goes through my mind every time I hear a non-profit executive director say those magical words:

“Thinking outside-the-box”

I don’t conjure up images of “innovation” or “leadership” like many other people apparently do. The first thing that runs through my head is “uh-oh, they’re in trouble”.  For me, the phrase “thinking outside-the-box” represents all of the following:

  • magical thinking
  • hope (which is not a strategy)
  • abandonment of best practices

I believe there are some “business practices” that are timeless and always work regardless of which sector you’re working and in what boxes you find yourself. Abandoning those practices in the name of “outside-the-box thinking” is what gets you in trouble.

For example, the following are just a few of the chapter titles you will find in the book:

  • The Money Box: Cash Is Everything . . . If you don’t manage your cash, you won’t be managing anything for long.
  • The Box Top: Customers Are the Boss . . . Give customers what they want, not what you want to give them.
  • The Basic Box: Some Things Never Change . . . Know the difference between what will change and what won’t, and pay attention to the former.
  • The Marketing Box: Unifying the Whole Business . . . You should be selling all the time.
  • The People Box: Hire Smart or Manage Hard . . . When it comes to people, you can hire smart and get out of the way, or you can run yourself ragged micromanaging.

There are many more chapters with equally thought-provoking business practices. Every new non-profit executive director should read this book.

Next week I will choose three chapters and go in-depth on those subjects in a way that speaks to the challenges non-profit leaders face every day. I also will pull stories from my non-profit experiences to illustrate those points and have a little fund along the way.

Using the poll below, please vote for three ideas that interest you the most. If you’re a subscriber and reading this as an email, you may not be able to vote (you never know … please try). If you find that you can’t vote from the email copy of this post, please click the hyperlink blog post title, which will take you to my WordPress blog site and cast your vote there. I am genuinely interested in your opinion and need help shaping next week’s content. Please?

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For the love of God, it is 2012 and it is a Presidential Election year. Please vote!

Have you ever done something that you and others considered “outside-the-box”? If so, what was it? Did it work? How do you know it worked? Would you have been better off building a different box per John Greco’s suggestion? Please weigh-in with your thoughts using the comment box below (and please take 5 seconds to cast your votes).

Here’s to your health!

Erik Anderson
Founder & President, The Healthy Non-Profit LLC
www.thehealthynonprofit.com 
erik@thehealthynonprofit.com
http://twitter.com/#!/eanderson847
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What’s the next “new thing” in non-profit fundraising?

A few weeks ago I had the opportunity to share a cup of coffee with a dear friend of mine who runs a local non-profit organization in Elgin, Illinois. During the course of that conversation, she openly wondered what the “next new thing” in non-profit fundraising will be. It was a great conversation . . . so, I’ve decided to share and engage all of you in the discussion.

Our conversation started off innocent enough. She was reflecting on the state of the local non-profit community, and I was scribbling notes frantically in hopes of possibly finding a business lead or two or three.  😉

I think she hit upon something very interesting when she said, “I’ve never seen a time when ALL of the different sources of funding were down at the same time and under so much pressure.” For example, when her agency’s United Way funding seemed to start trending downward, she found alternative revenue streams from federal, state, and local government agencies. When foundation and corporate sources would dry up, she was able to rely on individual giving and special events.

In her experience, non-profit fundraising was like a lava lamp with funding streams going up and down and coming back again. The world she described felt sustainable to her because as a strategic thinker she always seemed to be able to identify THE “next new thing” and position her agency to take advantage of it. However, today’s “New Normal” feels very different from any other time she’s experienced, and she wondered out loud what the next new thing will be.

As my coffee cup was near empty, she appeared thunderstruck and then said, “I just wonder if non-profits need to start looking at selling things like our for-profit friends do, but doing so in a way that it can be wrapped around our non-profit mission.”

Of course, she is speaking to the issue of “unrelated business income“. However, it might not have to be “unrelated”.

The example she gave involved operating a thrift store. However, she wondered if the store couldn’t also be linked to her non-profit’s client base with job training and childcare  opportunities infused throughout. This idea would involve donors donating items to the store. It would involve clients working at the shop, thus earning money, learning transferable skills, and becoming more self-reliant in life. It would involve subsidized childcare, which is a huge barrier to many single and working women trying to make ends meet. In the end, all of this would result in a revenue stream for the non-profit, and just possible THE “next new thing”.

I am intrigued by this idea and will spend the next few days blogging about unrelated business income and outside-the-box revenue ideas with which non-profits seem to be experimenting. I find this idea so interesting because many non-profit agencies haven’t had to think about business-related issues such as the marketplace, supply and demand, customers, pricing, etc etc etc.

So, please join me on this strangely curious trip and discussion.

Has your agency started examining the idea of “selling things” in an attempt to generate new revenue? If so, what have you tried and what was the result? What were some of the interesting disconnects you may have experienced when traveling down this road. Please share examples of other organizations in your community or nationally that have gotten into the unrelated business income game.

If you scroll down, you will see the comment box. You know what to do.  😉

Here’s to your health!

Erik Anderson
Founder & President, The Healthy Non-Profit LLC
www.thehealthynonprofit.com
erik@thehealthynonprofit.com
http://twitter.com/#!/eanderson847
http://www.facebook.com/eanderson847
http://www.linkedin.com/in/erikanderson847

Recruit dogs to serve on your board

Yesterday, I made a quick trip to PETCO because I needed to purchase dog food and cat food. When I got home, I checked my receipt and discovered that the cashier had added 22 cents to my bill as a donation to the PETCO Foundation. Hmmmm? I didn’t remember agreeing to make that donation. So, I decided to call the store just in case they were experiencing a glitch in their cash register software.

Needless to say, there was no glitch in the store’s software program. I was informed that every cashier is “supposed to” ask each customer if they would like to round their bill up to the nearest dollar amount and donate that amount to the PETCO Foundation. While I definitely didn’t agree to make any donation, I also didn’t want to make trouble for a minimum wage employee or make a big deal out of 22 cents. However, this experience did get me thinking:

  • I wonder how many of us accidentally make charitable contributions as a result of a cash register promotion and a clerical mistake? I bet this happens often and all of us should heed the old warning of “Buyer Beware!”
  • I started wondering whether or not a cash register promotion is a successful fundraising solicitation tool. Well, guess what … The PETCO Foundation took in $10,473,709 according to their last 990 tax document. While this revenue came in from many sources, I can’t help thinking that chump change apparently must add up quickly.
  • Finally, I started thinking that these darn dogs are so clever! They have us trained to provide them with food, shelter, love and now they’ve become really successful at fundraising.

For those of you who think I am just being silly with the last bullet point, then please take a moment to watch this YouTube video and I challenge you to tell me that I am wrong. LOL

Here is the sad truth about everything I’ve just written today … The dog in the video is 10-times more effective at fundraising than those volunteers who serve on your board of directors who continually say: “I’ll do anything else, but please don’t ask me to fundraise”.  The next time you find yourself fretting about board engagement in your organization’s resource development efforts just remember that the problem might not be your resource development program. The problem might just be your board development efforts. It could also be that you don’t have enough dogs sitting around your board room table!

Is your organization successful at board development? Is 100% of your board room packed with what you would consider fundraising rock stars? If so, please share your secret best practices around prospecting, recruiting, orientation, evaluation, etc! We can learn from each other. Please use the comment box below to weigh-in with your thoughts on these questions or anything I said earlier about cash register campaigns, etc.

(By the way, the picture in today’s blog is our dog “Lady Betrys of Cardiff”.  We call her Betrys, and this is her big internet debut. LOL)

Here is to your health!

Erik Anderson
Owner, The Healthy Non-Profit LLC
eanderson847@gmail.com
http://twitter.com/#!/eanderson847
http://www.facebook.com/eanderson847
http://www.linkedin.com/in/erikanderson847

Tin cup philanthropy

So, I was coming out of my local grocery store on Saturday and standing outside of the exit was a volunteer. She was holding a small plastic bank in the shape of a dog. Once I was in ear shot distance, she asked if I could spare some change for the local “low kill” animal shelter.

First, let me say that I know this charity. Second, let me say that I respect the work that this charity does. However, I did not part with my pocket change and found myself wondering instead:

  • How many hours was that volunteer standing there?
  • How much money could she possibly have collected during that time?
  • How much more money could she have raised in the same amount of time if she just asked a few of her friends who cared as much as she does about this cause to make a direct contribution?

Now there are some people who believe ALL charitable activities that ask people to make a contribution for nothing in return is “tin cup philanthropy”. If you don’t believe me, just read this Financial Times article for yourself. If you get really interested, you can cross check it with our friends at the Wharton School of the University of Pennsylvania who appear to have fallen in love with what they call “Experimental Entrepreneurship“.

As a donor and a resource development professional, I understand why so many people see traditional philanthropy as begging with a tin cup, and it goes beyond just the volunteer standing outside of my local grocery store begging for her charity of choice. It extends to many non-profit organizations who recruit volunteers who are “reluctant solicitors” in the first place and then provide little to no training to those volunteers. The end result is typically well-intentioned people going to their friends and neighbors begging them to make a pledge, purchase a raffle ticket or attend an event.

When this happens, very little time is spent talking about the community needs that the charity might be addressing with its programming. To be frank, it typically sounds like begging and sometimes degenerates into quid pro quo or favor granting.

While I am intrigued with “experimental entrepreneurship” and see nothing wrong with charities exploring it as revenue stream, I don’t think it is “the answer” to tin cup philanthropy.

Non-profit leaders need to recruit the right volunteers for their fundraising activities, and they need to do a better job of training and supporting those volunteers. Let’s stop begging and start talking about our mission; community needs & gaps; our programs, services & solutions; and most importantly the “return on investment” for the community that comes with making a charitable contribution.

Only once we start doing this will we be able to retire the old tin cup.

What has been your experience as a donor? A volunteer solicitor? If you are a non-profit staff person, am I off-base with my conclusions? And is anyone excited about experimental entrepreneurship and why?

Here is to your health!

Erik Anderson
Owner, The Healthy Non-Profit LLC
eanderson847@gmail.com
http://twitter.com/#!/eanderson847
http://www.facebook.com/home.php#!/profile.php?id=1021153653
http://www.linkedin.com/in/erikanderson847

Hiring a fundraising professional

Yesterday, we talked about the qualities and traits you should look for when hiring a “donor-centered” resource development professional. We ended up with some great comments and discussion. So, I decided to continue down this path a little farther today.

I oftentimes get asked the following two questions by small to mid-size non-profit organizations when it comes to hiring a RD professional:

  • When should we hire our first RD professional?
  • How much should we expect them to raise?

I believe an organization should consider hiring its first fundraising pro when it reaches a point when it feels like it needs more help to go to the next level. So, if a small organization is using committed board volunteers and an executive director to go from Point A to Point B in its resource development program, then it is a natural question during the annual evaluation process to ask once they get to Point B — “Do we need help getting to Point C or can we do it by ourselves?”

Evaluation is key to getting perspective and thinking through the question of when to hire your first RD professional. I also think Tony Poderis does a masterful job addressing this issue. Click here to read his article on this subject.

It is easier for me to definitively say that the following examples are times when an organization should NOT hire a RD professional:

  • When the board is tired of fundraising and wants to hire someone to do it for them
  • When the executive director of the organization is deemed to be inadequate at fundraising
  • When the organization doesn’t know in what direction it wants to go with its comprehensive resource development program.

As for ROI, I have heard lots of different opinions on this subject ranging anywhere FROM “one-times/two-times/three-times the RD professional’s salary” TO “you cannot measure it by dollars & cents because a good RD person makes board volunteers better fundraisers which leads to increased donor engagement”. I thought The Foundation Center did a nice job answering this question in their blog post.

When do you think an organization should hire its first fundraising professional or add more development people to the department? And do you have any suggestions on how to measure ROI? Please jump in and share your thoughts!

Here is to your health!

Erik Anderson
Owner, The Healthy Non-Profit LLC
eanderson847@gmail.com
http://twitter.com/#!/eanderson847
http://www.facebook.com/home.php#!/profile.php?id=1021153653
http://www.linkedin.com/in/erikanderson847

Strategic planning and donors

I have a good friend who is a classically trained organizational development professional. In a previous professional life, I employed him to work on a few different projects. In hindsight, he became a coach for me and I remember he used to always insist that the only way you get performance is by designing the process to accomplish exactly what you need … “performance by design”.

I started thinking about this in a strategic planning context this morning while walking the dogs. So, when I got back home into the delightful air conditioning (it is HOT in Chicago today), I googled the search words “strategic planning models”.  Click here to see more than 10 pages of process diagrams and countless pages of graphics.

If you need an explanation that doesn’t make your head hurt, I think our friends at managementhelp.org do a much better job of aggregating everything into five essential models. My “coach-friend” preferred the organic model and specifically liked one called “The Search Conference“.

With two degrees in urban planning and having facilitated countless strategic planning processes for non-profit organizations, I’ve learned that different situations require different models. However, regardless of the path you choose, it needs to engage those who you hope will get involved in future action for your organization.

With this being said, it is a mistake to involve just board and staff in a planning process. I believe whatever process is chosen, it needs to be inclusive of all stakeholders and for non-profit organizations this obviously includes donors. Here are a few of my random thoughts (regardless of which model you choose):

  • Ask key donors to volunteer on the ad hoc planning committee
  • Survey donors using paper surveys, electronic surveys and/or phone surveys (remember that one size doesn’t fit all and a diversity of responses requires varied survey instruments)
  • Interview donors one-on-one
  • Focus group of donors
  • If you are using a “search conference” model, invite donors to come to the conference and participate

Your strategic plan sets a direction and vision for your organization. If you want donors to invest in this vision, doesn’t it make sense to include them in the planning process?

Has anyone had success getting donors outside of your board volunteers and auxiliaries involved in a strategic planning process? Or do you have any suggestions? If so, please use the comment box and share. Thanks!

Here is to your health!

Erik Anderson
Owner, The Healthy Non-Profit LLC
eanderson847@gmail.com
http://twitter.com/#!/eanderson847
http://www.facebook.com/home.php#!/profile.php?id=1021153653
http://www.linkedin.com/in/erikanderson847

A dog’s life: Part 5 of 5

This is the last of five posts focusing on Frederick Reichheld’s book “The Loyalty Effect” and how the concept of “loyalty” effects for-profit and non-profit corporations equally. If you don’t own a copy of this book, I suggest you buy it, read it, and change your approach to doing business.

So, we’ve talked about the economics of creating loyalty, the three cogs in the loyalty machine (customers, investors, and employees),  the benefits of creating loyalty, identifying and cultivating the right customers, investors and employees, and the importance of measurement systems with connectivity to incentives & org culture. Today, we will end this “loyalty series” with a brief (and incomplete) discussion about “how to build loyalty”.

Here just a few things Reichhold says in his final few chapters that hit me as important:

  • We need to keep circling back to the question of “how do we build value” for customers, investors and employees. Filtering everything we do through this lens should keep us on the path towards building loyalty.
  • When starting to develop a loyalty-based program, we shouldn’t start with “tactics” but rather we should think strategically. There is a time and place for developing operational tactics, but it is later in the change leadership process.
  • Loyalty leaders are guided by principles: 1) focus the organization’s mission around loyalty and not revenues & profit and 2) use partnerships to “align, motivate and manage”.
  • Loyalty leaders use other loyalty-based companies to benchmark against and learn from (e.g. State Farm, American Express, Northwestern Mutual, A. G. Edwards, Chic-fil-A, and Leo Burnett).

When wading through all of these concepts, two things stuck out: 1) non-profit leaders need to focus on creating “value” for donors and employees and 2) we need to better utilize the power of “partnerships”.

From a non-profit perspective, it is hard to know what “creates value” for donors because many of them are not receiving anything tangible in return for their contribution (special event donors are obviously an exception and so are some NPR pledge drive recipients). What one donor perceives as value might not be seen as valuable by someone else. This is where the idea of “partnership” comes into play and what Penelope Burk says about a donor-centered approach to fundraising. In other words, we need to engage our donors in answering the questions around “creating value” (note – she surveys tens of thousands of donors every year in search of this question). Here are a few ideas you might consider for your organization:

  • Annual in-person meetings with our Top 50 or Top 100 lifetime donors with frank and open discussions about what the non-profit organization can do to create value
  • Focus groups with diverse donor groups and even lapsed donors with frank and open discussions about what the non-profit organization can do to create value
  • Donor surveys getting at the idea of “donor satisfaction”

Of course, tactically speaking there are many different “loyalty tools” in our resource development tool chest (e.g. newsletters; e-blasts; stewardship receptions; programs; activities; volunteer opportunities; mission moments; etc). However, unless we understand what our employees, board volunteers, and donors “value” as part of their involvement with our organization, we cannot effectively employee these tools.

It essentially boils down to communication and follow-through on what you learn.

The other aspect of “partnership” that we haven’t really talked about for non-profit organizations is how to engage and connect customers, investors and employees (aka donors, board volunteers and employees) with each other. One easy way to do this is through any planning process (e.g. resource development plan, strategic plan, stewardship plan, etc). Remember — planning is a means and not an end. Or stated another way — planning is an “engagement activity” and a process that you employ with those you want to get involveddown the road in some capacity.

The idea of building a “loyalty-based” organization is complex. So much so, that Reichheld didn’t just write “The Loyalty Effect,” he also wrote a follow-up book titled “Loyalty Rules” and developed an interesting website with additional resources. My five-part blog series just scratches the surface of this topic. I encourage you to do a lot more reading and then circle back share what you’ve learned with the rest of us.

I’ll end on this note … making the transition from a transactional resource development program to a loyalty-based and donor-centered culture is not something that can be done overnight. It is a change initiative that probably will require you to engage external assistance to help you and all of your key stakeholders frame and guide the process. (That is my self-promotional message for this week. LOL Enjoy the weekend & I’ll see you again on Monday)

Here is to your health!

Erik Anderson
Owner, The Healthy Non-Profit LLC
eanderson847@gmail.com
http://twitter.com/#!/eanderson847
http://www.facebook.com/home.php#!/profile.php?id=1021153653
http://www.linkedin.com/in/erikanderson847

A dog’s life: Part 4 of 5

This is my fourth of five posts focusing on Frederick Reichheld’s book “The Loyalty Effect” and how the concept of “loyalty” effects for-profit and non-profit corporations equally. If you don’t own a copy of this book, I suggest you buy it, read it, and change your approach to doing business.

I once worked for a smart boss who said, “What get’s measured, gets done! ” Of course, she said it in a very crisp British accent. And she was right.

Reichheld spends all of chapter eight talking about measuring loyalty and creating a more balanced dashboard tool that includes loyalty measurements. I especially liked his point that “… measurement lies at the very heart of both vision and strategy.”  Here is a little more from Reichheld (page 217) on how important measurement is:

“Measurement is the business idiom. Just as language shapes thought and communication, measures shape the attitudes and behavior of a business organization. The choice of what a business measures communicates values, channels employee thinking, and sets management priorities … Deciding what to measure and how to link measures to incentives are among the most important decisions a senior manager can make.”

Yesterday, I ended my blog with a link to an article from studyfundraising.info. In that article, they provided some suggestions on things to measure with regards to loyalty. I urge you to re-read that article and consider developing a scorecard or dashboard with some of those measures.

After a robust walk with the dogs this morning, I came up with some additional suggestions (some of which align with Reichheld and some don’t). So, here are some additional measures you may want to consider:

  • Donor renewal rate for your overall resource development program as well as for individual fundraising campaigns (this year versus last year)
  • Year-end evaluation of donor database with measurements focusing on:
                  * what percentage of donor records contributed in the last 12 months
                  * what percentage of donor records contributed 13 to 24 months ago
                  * what percentage of donor records contributed 25 to 36 months ago
                  * what percentage of donor records contributed 37 to 48 months ago
                  * what percentage of donor records contributed more than 49 months ago
  • What percentage of last year’s “first time donors” renewed their financial support (regardless of the fundraising campaign). In other words, how many second time gifts did you get from last year’s first time donors?
  • Comparison of this year’s pool of donors versus last year’s pool of donors on the average number of years a donor has supported your organization with a financial contribution
  • The number of “total number of private sector dollars raised divided by the total number of “stewardship touches” (e.g. all touches with donors and prospects who didn’t contribute) … compare this year’s number versus last year
  • For certain fundraising campaigns (e.g. annual campaign pledge drive), a comparison of how many renewing donors increased their contributions versus decreased versus stayed the same
  • For your organization’s “Top 50 Lifetime Donors,” the percentage increase of the total value of their contributions this year over last year (and perhaps even year-to-year over a five-year trending period)
  • Using an annual donor survey to measure “donor satisfaction” with your organization’s ability to impact change through programming

Tomorrow is the last day of this blog series on donor loyalty, and we’ll focus on strategies and activities to help build loyalty. However, I strongly urge you to invest time and resources in measurement systems and providing transparency in reporting these facts because it is this data that will drive strategy and performance.

Does your organization used specific “loyalty measures”? If so, please share your ideas with us in the comment section of this blog. If you think I’ve missed something, please weigh-in. There are no right or wrong answers.

Here is to your health!

Erik Anderson
Owner, The Healthy Non-Profit LLC
eanderson847@gmail.com
http://twitter.com/#!/eanderson847
http://www.facebook.com/home.php#!/profile.php?id=1021153653
http://www.linkedin.com/in/erikanderson847

A dog’s life: Part 3 of 5

This is my third of five posts focusing on Frederick Reichheld’s book “The Loyalty Effect” and how the concept of “loyalty” effects for-profit and non-profit corporations equally. If you don’t own a copy of this book, I suggest you buy it, read it, and change your approach to doing business.

Reichheld spends more than half of his book making the case for business leaders to understand the true costs of not understanding and incentivizing loyalty. Throughout the book he mathematically proves that:

  • Increasing customer, employee & investor loyalty results in a company spending less on customer acquisition in the long-term
  • Increasing customer, employee & investor loyalty results in increased profits
  • Increasing customer, employee & investor loyalty results in decreasing costs for the company
  • Increasing customer, employee & investor  loyalty results in more referrals and a self-perpetuating cycle of loyalty

After looking at these conclusions through a non-profit lens, I’ve come to the conclusion they are equally true for non-profit organizations. After all, how many times has one of your most loyal donors brought their friends to a special event fundraiser or hosted a cultivation or stewardship event for you?

I also found it interesting that Reichheld spends three chapters discussing the importance of finding and acquiring the “RIGHT” customers, employees & investors. While I understand how this applies to hiring non-profit employees, I had a problem wrapping my head around how it might apply to donors … until I remembered the Rubber Duck Race raffle/fundraiser I used to run every year.

In my six years of running that fundraiser, we built a donor database from a small handful of loyal donors to more than 12,000 donor records. While many of those donors enjoyed purchasing their $5.00 duck adoption for a chance to win a new car, I had a terribly difficult time getting many duck donors to cross over into my annual campaign or other resource development activities.

I also wonder what National Public Radio (NPR) fundraising professionals experience when they incentivize donors with premium giveaways. I suspect Reichheld would say that those who donate in spite of the giveaways would be the “RIGHT” kind of donors and those who contribute in order to get their names entered into a drawing for a new iPad cost you more money to retain in the long-term.

In the end, it becomes very clear to me that building a resource development program with “donor loyalty” at its heart requires a plan that invests (both time and money) heavily in:

  • donor identification & prospecting
  • prospect cultivation
  • donor stewardship

As I did in yesterday’s blog, I will end today with one more link to additional donor loyalty resources from the nice people at studyfundraising.info who posted “Donor Retention and Loyalty“. There is a great bibliography for those of you looking for good reading!

Here is to your health!

Erik Anderson
Owner, The Healthy Non-Profit LLC
eanderson847@gmail.com
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